In the News: Blog

The name of Obamacare’s enacting law, the Affordable Care Act, is looking more than ever like a case of consumer fraud. Insurers offering coverage on its government-run “exchanges” are asking regulators for double-digit premium increases.

The Wall Street Journal reported over the weekend:

“In a study across 45 states, the research outfit Health Pocket reports that mid-level Exclusive Provider Organization plans are 20% more expensive in 2016 on average. HMOs are 19% more expensive, and for all plan types the average is 14%.”

Some places and some plans are worse. The Journal reported that in Tennessee, where President Obama last week said his law with an Orwellian name “worked better than we expected,” big insurers were seeking premium increases of more than 30% in one year.

It’s not because underlying health care costs are rising, the paper reports – “this trend is merely about 3.5% to 7% depending on the state. Health plan profits are capped by ObamaCare price controls, so don’t blame corporate greed either.”

Instead, it’s federal involvement that is to blame:

“The detailed, fact-heavy actuarial filings justifying these increases show that they result from ObamaCare’s political regulations. The law bans insurers from charging people prices linked to their health risks in order to force the young and healthy to cross-subsidize their elders. But if premiums don’t cover medical claims, then premiums must rise to fund these cost transfers.
“After the first two years of ObamaCare in 2014 and 2015, insurers have more experience with the demographics and expenses of the new enrollees. They seem to be older and have more chronic conditions like diabetes or congestive heart failure than predicted. There are also fewer than expected.”

The data show that people who don’t make much money and who then get more generous taxpayer subsidies are much more likely to sign up for plans. Few higher-income people sign up. The Journal points out:

“In other words, the more lower- and middle-income people must pay for ObamaCare with their own money, the less likely they are to participate. They are concluding that ObamaCare plans—with their overly rich mandated benefits, narrow physician networks, and hidden income redistribution—do not offer a good value for the price. This is not a formula for healthy insurance markets.”

This isn’t unforeseen: The New York Times, of all places, was reporting similar news last fall. But now it’s becoming so obvious that even liberals are noticing. The left-wing website Slate recently had an article about “Obamacare’s . . . skyrocketing premiums” that concluded, “you shouldn’t need a political consultant to tell you why consumers paying hundreds of dollars—or even more than $1,000 a month—for health insurance they are required to buy and often can’t afford to use might well get angry.”

Or, as Michael Cannon of the Cato Institute put it on Monday:

“ObamaCare doesn’t make health insurance more affordable. It robs Peter to pay Paul. When selling ObamaCare, supporters told everyone, ‘Don’t worry, you’re Paul.’ But as time goes by, more Americans are realizing they’re not Paul. They’re Peter.”

Time for something better: Time to start repealing mandates and restoring freedom and choice to Americans.